SC3$PROJECT$DELIVERABLES$$Santa%Cruz%County%

Sacha%Lozano%slozano@rcdsantacruz.org%SPUR%panel,%May%14%2014%

1.  Countywide%“appraisal%of%natural%systems”:%•  Countywide%valuaHon%of%ecosystem%services%and%natural%capital%assets%(benefit%

transfer%valuaHon%by%land%cover%type%–%“ESV%Report”)%2.  Economic%assessment%of%land%stewardship%acHons:%

•  Land$acquisi9on$and$stewardship$–%Applying%benefit%transfer%valuaHon%to%conduct%benefitQcost%analysis%of%State%Parks%properHes%within%the%county%

•  Program$level$economic$impacts$–%Leveraged%funds%and%jobs%creaHon%analysis%for%Santa%Cruz%County’s%%Integrated%Watershed%RestoraHon%Program%(IWRP)%

•  Project$level$return$on$investment$analysis$–%Primary%valuaHon%of%ecosystem%services%(and%ROI)%associated%to%Managed%Aquifer%Recharge%in%Pajaro%Valley%%

•  Synergy$between$built$capital$and$natural$capital$–%IllustraHve%stories%on%the%economic%value%of%mulHQbenefit%stewardship%projects%%

Inform%decisions%and%future%investments%on%conservaHon%and%stewardship%

Valua9on$products$&$scales$

$$800$million$–$$2.1$billion$per$year$

Land$Cover$ Area$(Ac)$ Low$Value$($/year)$ High$Value$($/year)$DECIDUOUS%FOREST% %%%%%%128.5%% $495,194% $2,178,151%EVERGREEN%FOREST% %%%%%%143,513.5%% $466,139,770% $1,234,818,447%MIXED%FOREST% %%%%%%%%47,951.5%% $208,563,856% $539,937,280%SHRUB/SCRUB% %%%%%%%%23,742.2%% $46,729,225% $52,524,955%GRASSLAND% %%%%%%%%18,609.8%% $71,423,686% $152,195,394%ESTUARINE%EMERGENT%WETLANDS% %%%%%%%%%%%%%%165.9%% $2,602,300% $8,375,231%PALUSTRINE%EMERGENT%WETLANDS% %%%%%%%%%%%%%%856.8%% $1,827,646% $54,974,085%ESTUARINE%WOODY%WETLANDS% %%%%%%%%%%%%%%213.1%% $370,097% $11,170,642%PALUSTRINE%WOODY%WETLANDS% %%%%%%%%%%1,054.9%% $1,609,721% $58,075,084%PASTURE/HAY% %%%%%%%%%%%%%%681.3%% $331,912% $7,122,612%CulHvated% %%%%%%%%15,349.7%% $1,862,251% $38,633,761%

Ope

n%Water% Bay% %%%%%%%%%%%%%%%%14.2%% $65,632% $217,584%

Lake% %%%%%%%%%%%%%%351.7%% $998,783% $1,168,233%Reservoir% %%%%%%%%%%%%%%148.3%% $702,244% $702,244%River% %%%%%%%%%%%%%%%%88.6%% $251,677% $294,376%

High%Intensity%Developed% %%%%%%%%%%1,972.3%% $0% $0%Low%Intensity%Developed% %%%%%%%%10,822.5%% $0% $0%Medium%Intensity%Developed% %%%%%%%%%%9,531.0%% $0% $0%Developed%Open%Space% %%%%%%%%%%9,633.7%% $5,049,678% $28,520,353%Bare%Land% %%%%%%%%%%%%%%537.7%% $0% $0%Unconsolidated%Shore% %%%%%%%%%%%%%%%%74.7%% $0% $0%Beach% %%%%%%%%%%%%%%665.4%% $1,978,122% $6,135,304%

$$$$$$$$$286,107$$ $811,001,795$ $2,197,043,736$

Total$Annual$Value$provided$by%Santa%Cruz%County’s%natural%assets%

%

$22%to%$58%billion%at%a%discount%rate%of%3.5%%%(which%treats%natural%capital%like%a%short%lived%built%capital%asset)%%

$81%to%$207%billion%at%a%discount%rate%of%0%%%(which%assumes%100%years%from%now%people%will%enjoy%the%same%level%of%benefits%from%this%natural%capital%that%we%enjoy%today)%

%*Key$message:%The%Asset%Value%of%natural%capital%can%be%increased%with%effecHve%conservaHon%and%stewardship.%%

Estimated Net Present Value (or Asset Value) of Santa Cruz County’s natural capital

over the next 100 years

Land$Acquisi9on$&$Stewardship%California%Department%of%Parks%&%RecreaHon%(State%Parks)%

14%State%Parks%in%Santa%Cruz%County%(45,000%acres)%! %Wildlife%corridors%linking%mountains%to%coastline%%

! %RecreaHon%and%tourism%desHnaHon%! MulHple%Ecosystem%Services%

Benefit%Cost%Analysis%

Ecosystem%Services%+%Park%Revenues%%%%

Divided%by%%%

Land%AcquisiHon%Costs%+%OperaHon%and%Maintenance%Costs%%

1906%Q%2011%

Ecosystem%Services%Value%

Step$1$–%Avg%of%$200million%annual%flow%of%benefits%(in%2012%dollars),%from%benefit%transfer%valuaHon%%%Step$2$–%EsHmated%total%value%between%1906Q2011:%$11.7%billion%(annual%benefits%weighted%by%how%many%of%the%45,000%acres%had%been%acquired%by%each%given%year)%%Step$3$–%Corrected%total%value,%considering%%that%some%level%of%ecosystem%services%would%sHll%have%been%provided%in%absence%of%State%Parks:%$1.2$billion$

(Benefit%Transfer%ValuaHon)%

Total (1906-2011)% Data%Source%

Public Benefits%Ecosystem Services% $1,171,182,753% BTV%Parks Revenue% $419,270,316% 2012Q2013%records%Total% $1,590,453,069%

Public Costs%State Parks Land Acquisition % $153,720,885% 1906Q2011%records%State Parks O&M% $892,895,643% 2010%records%State Parks O&M (Volunteers)%

$146,703,434% 2010%records%

Total% $1,193,319,962%

BCA Ratio% 1.33%

Benefit%Cost%Analysis%

*%Revenue%and%Costs%data%for%“nonQrecorded”%years%was%extrapolated%to%the%1906Q2011%period%by%inflaHng%to%2012%dollars%%and%weighing%annual%esHmates%by%the%percentage%of%land%acquired%by%each%given%year%(compared%to%the%current%45,000%acres)%

Program$Level:$IWRP%Integrated%Watershed%RestoraHon%Program%

IWRP%economic%analysis:%Leveraged$funds:$From%an%annual%tax%funding%base%of%$40Q50K%the%RCDSCC%leveraged%partnerships%and%raised%$17$million$from%private%and%public%sources%for%IWRP%projects%between%2005Q2012.%Local$Economic$Effects:$Based%on%peerQreviewed%job%and%economic%mulHpliers,%such%investment%resulted%in%a%total%economic%impact%of%$46$_$$65$million$and%supported%250$to$400$local$jobs.%Benefit_cost:$How%does%program%cumulaHve%benefit%compare%to%$$%invested?%(including%ES)%

IWRP:%107%projects%since%2005%

Addressing%Groundwater%Overdras%in%the%Pajaro%Valley%

Project$Level:%Managed%Aquifer%Recharge%(MAR)%

pumping"

seawater"intrusion"

12,000 AF / year"overdraft"

Desal Plant!

Water Recycling

Plant !"

Import Pipeline!

$1,037/AF$

$1,500/AF$

$3,400/AF$

CONSERVATION (Management + Green

Infrastructure) $200/AF$$

5000%AF/yr%

10 other alternatives in

Basin Management

Plan!

" Avg$$1,781/AF$

Community%Water%Dialogue%

Wireless$Irriga9on$Network$ Managed$Aquifer$Recharge$

(Grey%&%Green%infrastructure%synergy)%

StakeholderQdriven%collaboraHon%/%Portolio%of%mulHQbenefit%conservaHon%projects%%to%address%aquifer%overdras%in%the%Pajaro%Valley%

Photo%Credit:%Andy%Fisher%

Return%on%Investment%(ROI)%analysis%BokarizaQDrobac%MAR%site%

120%acres%drain%into%2%acres%

Photo%Credit:%Andy%Fisher%

Photo%Credit:%Emily%Paddock%

Bokariza%MAR%project%ROI%

Ecosystem$Services%Market$Proxy% Valua9on$

Method%Calcula9on$%

Range$of$Values$Per$Yr%

Water$supply$(quan9ty)$%

Cost%of%alternaHve%water%sources%based%on%PVWMA%BMP%2000%

alternaHves%Replacement%cost%

$551%per%AF%x%90%AFY%=%$49,590%

(2015Q2025)%and%

$2,023%per%AF%x%90%AFY%=%%

$182,070%(2025Q2040)%

%%Min%$49,590%Max%$182,070%

Water%as%input%to%strawberry%producHon% Input%Factor%Income%

45ac%x%$50,000%=%$2,250,000% Max%$2,250,000%

Water$$quality$%

Saltwater%intrusion%prevenHon%through%recharge,%priced%at%cost%of%

desalinaHon%based%on%PVWMA’s%BMP%Avoided%cost%%

$3,400%per%AF%x%90%AFY%=%$306,000% $306,000%

Biological%denitrificaHon%treatment%costs%(least%expensive%opHon)%% Replacement%cost% $439%x%90acs%=%$39,510% $39,510%

Flood$control%Costs%of%road%protecHon%against%soil%erosion%based%on%a%California%study%

(Rein%1999)%%Benefit%transfer%

Between%$204%Q$1393/ac/yr%if%we%assume%2ac%

=%$408%to%$2786%

Min%$408%Q%%%%%%Max%$2786%

Recrea9on% Wetland%values%in%California%from%primary%studies%based%on%recreaHon% Benefit%transfer%

$177%x%2=%354%or%$1,500%x2=%$3,000%

Min%$354%Q%%%%%%Max%$3000%

Habitat%Wetland%Reserve%Program%as%

implemented%under%USDA%Natural%Resource%ConservaHon%Service%(NRCS)%

Direct%Market%Price%$24,000%/%25%years%=%$960/year%

%$960%

Ecosystem$Service$Benefit$Values:%

Bokariza%MAR%project%ROI%

Summary$of$Project$Costs:%

Type$of$cost% Market$proxy% Per$year%

Opportunity%cost%of%not%producing%in%recharge%area%%%

2%acres%of%strawberry%at%$50,000/acre%

$100,000%%

Fixed%Costs:%Infrastructure%and%staff,%permit%coordinaHon%

Total%since%2010%=%$70,000%$70,000%/%15%years%of%operaHon%=%$4,600%

Maintenance%cost% AssumpHon%per%year% $5,000%%

Bokariza%MAR%project%ROI%All$benefit$values$averaged$15yr$horizon:%

Benefits%%Value%per%

yr% Costs%%Value%per%yr%

Average%value%of%water%supply% %$%%1,149,795%%

Opportunity%cost%of%strawberry%producHon%% %$%%%100,000%%

Average%value%of%flood%control% %$%%%%%%%%%%1,597%%

Fixed%costs%distributed%over%15%years%% %$%%%%%%4,600%%

Average%value%of%recreaHon% %$%%%%%%%%%%1,677%

%Maintenance%costs%% %$%%%%%%5,000%%

Average%value%of%habitat% $%%%%%%%%%%%%960%

Total$ $$$$1,154,029$$ $Total$$ $$$$109,600$$

%% %% $ROI$% 953$%%

Benefits%%Value%per%yr% Costs%

%Value%per%yr%

Average%value%of%water%supply%90%acs%per%yr%unHl%2040% %$%%%129,096%%

Opportunity%cost%of%strawberry%producHon% %$%%%100,000%%

Average%value%of%flood%control% %$%%%%%%408%%

Fixed%costs%with%a%life%of%25%years% %$%%%%%%2,800%%

Average%value%of%recreaHon% %$%%%%%354%%

Maintenance%costs% %$%%%%%5,000%%

Average%value%of%habitat% $%%%%%960%

Total$ $$130,818$$ Total$ $$107,800$$

%% %% ROI% 21$%%

Low$benefit$values$only$(conserva9ve)$25yr$horizon:%

• Inform$Benefit_Cost$Analysis$(BCA)$•  Flood%hazard%miHgaHon%in%Pajaro%Valley%(FEMA%funds)%•  STARS%raHng%system%(triple%bovom%line)%

• Inform$environmental$impact$statements$•  Site/project%specific%CEQA,%NEPA%%

• Es9mate$rates$of$return$on$investment$in$conserva9on$• Managed%Aquifer%Recharge%•  ConservaHon%Easements%• Watershed%RestoraHon%• MulHQbenefit%stewardship%of%working%lands%

• Define$scale$of$investment$• QuanHfy%and%communicate%local%economic%impact%of%conservaHon%and%stewardship%acHons%•  IdenHfy%and%develop%funding%and%investment%mechanisms%•  Support%public%funding%measure%for%collaboraHve%stewardship%of%natural%assets%in%Santa%Cruz%County%

PracHcal%ApplicaHons%

Next$step:$place%Ecosystem%Service%Values%in%the%context%of%local%stakeholder%processes%and%plans%

Thank$You!$